Dental Insurance

Dr. Pamela Maragliano-Muniz never thought she’d end up fixing teeth for a living.

Pamela MARAGLIANO-MUNIZ: I thought I’d become — I don’t know — a professional hockey player or something like that. 

Her dreams of glory on the ice didn’t pan out, and her father suggested dental hygienist school.

MARAGLIANO-MUNIZ: And I got right into dental hygiene school, and who knew? I absolutely fell in love with it. I felt like I was finally going to school with a purpose for the first time. And I felt that if I was going to place my hands on another human, there’s such a responsibility that comes with that.

Maragliano-Muniz became a hygienist — but she didn’t stop there. She completed her Doctor of Dental Medicine degree, became a dentist, and in 2014 bought her own practice in Salem, Massachusetts. She was excited to get to work helping her patients and building her business. But she soon found herself spending much of her time navigating the complex rules of dental insurance plans.

MARAGLIANO-MUNIZ: For example, some plans only allow two dental hygiene visits a year and sometimes it’s twice within the calendar year. Doesn’t matter really when it is. But then there’s some that say, “No, no, no. We only allow two hygiene visits, but they have to be six months and a day apart.” So, you just have to kind of follow all of the rules of that plan. 

In the course of sifting through the intricacies of these plans, Maragliano-Muniz began to ask herself some fairly existential questions: What is dental insurance, anyway? Why isn’t it part of medical insurance? And what were her patients getting when they signed up for it? Eventually, she came to a realization.

MARAGLIANO-MUNIZ: I think the number one problem is the fact we call it insurance.  

For the Freakonomics Radio Network, this is The Economics of Everyday Things. I’m Zachary Crockett. Today: dental insurance.

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If you have medical insurance, you expect it to cover at least some of the cost of treatment when you have an illness or an injury — unless that illness or injury involves your teeth. What puts those enamel-covered mouth nubs in a separate category from the rest of your body? The answer goes back a couple of centuries.

Brad BOLMAN: Dentists were — in the 1700s, in the 1800s — they were often these carnivalesque performers who would have little shows and moving performances while giving dental care to people. And, partly, the performances were designed to muffle the screams of people having their teeth pulled. 

That’s Brad Bolman. He researches the history of medicine at the Institute for Advanced Study in Princeton, NJ. And he says that in the eighteenth and nineteenth centuries, dentistry was sort of a weird profession.

BOLMAN: A lot of the time, these dentists were somewhat itinerant. They would offer perhaps multiple services. So maybe teeth pulling, and a haircut or something like that. The performances might include juggling—the dentists were often these larger than life impresario figures who would maybe pull your teeth while making jokes or giving lectures.

In the early nineteenth century, all of medicine started to professionalize and specialize — and dentists wanted in. But they had a bit of a PR problem.

BOLMAN: For a lot of the medical profession, dentists are still seen as a barbaric little sideshow or something like that. You know, it’s not the most prestigious kind of medicine that someone could practice. And, in a sense, that’s at the root of this historic rebuff.

The “historic rebuff” that Bolman is referring to took place in Baltimore around 1840.

BOLMAN: You had these two dentists: Horace Hayden and Chapin Harris, who come to the medical faculty at the University of Maryland, and they say, “We want to start teaching dentistry here.” They’re refused. And this moment really sets the foundation for these dual trajectories between medicine and dentistry.

CROCKETT: So, you’re telling me that we can trace the origins of the separation to basically two guys who are rejected from medical school? 

BOLMAN: I think, in a sense, that is right. That’s at least the story that dentists like to tell. 

Hayden and Harris responded to that snub by founding the first dental school in the world, in Baltimore. By 1900, the U.S. had 56 more of them. Dental education was booming — and dentistry itself was changing, too.

BOLMAN: During the period when these institutions are growing, you get some of the first widespread uses of anesthetics, which makes teeth pulling a slightly less painful endeavor. You start to get debates among dentists about, “What is the goal of dentistry? What should a dentist be doing?” And then of course, there’s a natural development where tools get better, you get some early mechanical drills, which allow for more effective response to dental maladies. So there’s this widespread growth in dental practice, in dental technique, but, because of the separation, you really get this sense that being a dentist is something different than being a doctor. 

Dentists evolved from carnival-style performers into trained professionals doing valuable medical work. But that separation between dentistry and other forms of medicine persisted — partly because dentists wanted to be in their own camp. Above all, they didn’t want dental services to be included in medical insurance. Both doctors and dentists fought against proposals to institute government-provided health insurance. In the decades after World War II, the doctors got on board with the system of employer-sponsored plans that cover most of us today. But the dentists didn’t.

BOLMAN: Dental practice in the mid 1900s is typically very different from medical practices. Dentists often work in their own small offices. They often own their practices, rather than being part of a hospital, or being part of a larger practice. So there’s very much an individualistic approach and ideology to a lot of dentists.  

The American Dental Association kept up the fight against state-subsidized coverage.

BOLMAN: So in 1964, Medicare is proposed and the idea is that it would cover basic health care across the board, that would include dentistry and dental visits. The ADA fights a really vicious battle against   including dental benefits within Medicare. It’s a key fight for the dentists. And ultimately they win: teeth are excluded from basic Medicare benefits.

While dentistry is mostly excluded from public insurance programs, there are now hundreds of companies offering private dental insurance policies to Americans. But, are they really insurance policies?

MARAGLIANO-MUNIZ: Dental insurance is simply a gift card. 

That’s coming up.

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MARAGLIANO-MUNIZ: People in general need to understand and get a realistic view on what dental insurance is. 

Again, that’s Dr. Pamela Maragliano-Muniz.

MARAGLIANO-MUNIZ: I think the number one problem is the fact we call it insurance because when you hear insurance, you think of, oh, I have homeowner’s insurance, I have medical insurance, I have life insurance. So, when something goes catastrophically bad, this insurance that you’ve paid for is there to support you in that. However, dental insurance does not operate that way. And so I think that patients think that, well, I have dental insurance. That should be the same as the way my medical insurance works. And it does not. 

Medical insurance, like most things we refer to by the name “insurance,” works by pooling risk. In a given year, most of us will pay more for health insurance premiums than we get back in medical services. But a few people will need a lot of treatment, and their insurance will pay out much more than their premiums cost. We accept that deal because, even if we’re healthy now, there’s always the risk that we’ll get sick. A dental insurance plan doesn’t work like that.

MARAGLIANO-MUNIZ: Imagine you lost all of your teeth for some reason or from a personal standpoint, say your house burns down. You contact your insurance company, and can you imagine if the insurance company is like, “We’ll clean your windows and paint your siding.” And you’re like, “No, no, no, wait — my whole house burned down! I don’t even have a hou— I don’t even have windows anymore!” And they’re like, “Well, we’ll clean your windows and paint your siding.” And you’re like, “But that’s not what I need.” But that’s what dental insurance is. 

Dental insurance pays for routine treatment — cleanings, x-rays, the stuff we should all be getting every year. If you have a cavity or need a crown or dentures, your dental insurance plan will cover some of that. But most dental plans have a “maximum benefit” of around $1,500 a year. That’ll cover those cleanings but it won’t help if you have a dental catastrophe — an infection that causes an abscess, a badly cracked tooth, or any kind of mouth trauma.

MARAGLIANO-MUNIZ: It’s kind of the opposite approach as what insurance should be. You’re getting a $1,500 gift card per year, that doesn’t really cover that much of your dental.

In other words, when you sign up for dental insurance, you’re paying for, at most, a small discount on your dental work over the next year.

MARAGLIANO-MUNIZ: Dental practices will work very hard to maximize whatever benefit the patient has. But it’s important to understand that unless you are generally healthy and you just need dental hygiene visits, then, you know, you’re really going to probably max out relatively quickly.

Wendell POTTER: If you were selling this kind of insurance, you can see how profitable it can be because you’re not providing very good coverage.

That’s Wendell Potter. He used to be an executive at the insurance giant Cigna. But after witnessing his share of horrors in the American healthcare system, he switched sides and became an activist.

POTTER: I’m president of the Center for Health and Democracy, which is a nonprofit organization dedicated to healthcare reform.

As Potter explains it, the other difference between medical and dental insurance has to do with what’s called the medical loss ratio — that’s the share of revenue that the insurer has to spend on medical care for policyholders.

POTTER: In a medical insurance plan you have, by law, a requirement that medical insurers spend at least 80 percent of  what we pay in premiums, that goes to medical care. There’s no such thing in dental care. So it’s kind of the Wild West out there for dental benefits. 

That might be starting to change. In Massachusetts, where Maragliano-Muniz practices dentistry, voters approved a ballot measure in 2022 requiring dental insurers to spend at least 83 percent on care.  Outside of Massachusetts, there are no requirements. So dental insurance works pretty well for insurance companies, and not that great for patients. How does it work for dentists? Well, it faces them with a choice: they can sign up to become part of the insurer’s network, or stay out-of-network. Joining the network helps attract patients.

MARAGLIANO-MUNIZ: You can build a practice much faster when you participate in insurance plans. If you participate, you’re on a list, and it makes it a little bit easier for patients to find you. It’s almost low hanging fruit for patients to find a dentist. They say, “Oh, I subscribe to this insurance. Let me find a dentist that’s close to me.” But there’s a tradeoff. 

If you’re in an insurance network, the insurer gets to set the prices you charge its members.

MARAGLIANO-MUNIZ: Every insurance has their own fee schedule on what they feel your procedure is worth. Let’s say a crown. They say, “Okay, our usual and customary fee for a crown is, say, $1,000.” And they will pay 50 percent of $1,000. So, say your crowns are $1,500, just by being in network with this insurance plan you have to write off contractually $500 on every single crown that you perform. // You may accept three different fee schedules from three different insurance companies. It’s just what it means to be in network with them. 

So could dental insurance ever look more like medical insurance? Could it even become part of your health plan? Historian Brad Bolman says … maybe.

BOLMAN: People are starting to wonder again why they don’t have access to free dental care, or at least cheap dental care. So, my sense is that we’re moving toward a world where these things are going to be merged somehow. That’s the optimistic side of me. But then you also see this really intense and long fight to keep dentistry and medicine separate. So, I think it won’t be easy to transform some of these systems because there are a number of people who are fighting to keep this system in place.

In the meantime, dentists are trying to come up with better ways for patients to pay for care.

MARAGLIANO-MUNIZ: Some practices offer in-house membership plans. It’s almost like Netflix. You pay a monthly fee, and it covers all of your preventive visits, and then you have a percentage off of any restorative visit that you have. 

Wendell Potter sees value in that approach.

POTTER: I am one of the people who pays an annual amount to my dentist for my care, and I find that to be more cost-effective. I do not have dental insurance myself. It’s such a waste of money, in my view.

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For The Economics of Everyday Things, I’m Zachary Crockett. This episode was produced by Julie Kanfer and Sarah Lilley, and mixed by Jeremy Johnston. We had help from Daniel Moritz-Rabson.

BOLMAN: There are a lot of great dentists: I don’t want to come out as an anti-dentist figure. 

CROCKETT: Right. And I don’t think you’re coming across that way at all. 

BOLMAN: Okay, good. I loved my childhood dentist. He was a great guy.